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Public Employees as Politicians: Evidence from Close Elections

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  • Hyytinen, Ari
  • Meriläinen, Jaakko
  • Saarimaa, Tuukka
  • Toivanen, Otto
  • Tukiainen, Janne

Abstract

We analyze the effect of municipal employees' political representation in municipal councils on local public spending. To quantify the effect, we use within-party, as-good-as random variation in close elections in the Finnish open-list proportional election system. One more councilor employed by the public sector increases spending by about one percent. The effect comes largely through the largest party and is specific to the employment sector of the municipal employees. The results are consistent with public employees having an information advantage over other politicians, and thus, being able to influence policy.

Suggested Citation

  • Hyytinen, Ari & Meriläinen, Jaakko & Saarimaa, Tuukka & Toivanen, Otto & Tukiainen, Janne, 2016. "Public Employees as Politicians: Evidence from Close Elections," Working Papers 78, VATT Institute for Economic Research.
    • Handle: RePEc:fer:wpaper:78
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    6. Harjunen, Oskari & Saarimaa, Tuukka & Tukiainen, Janne, 2021. "Political representation and effects of municipal mergers," Political Science Research and Methods, Cambridge University Press, vol. 9(1), pages 72-88, January.
    7. Markus Jokela & Jaakko Meriläinen & Janne Tukiainen & Åsa von Schoultz, 2022. "Personality Traits and Cognitive Ability in Political Selection," Discussion Papers 152, Aboa Centre for Economics.
    8. Benoît LE MAUX & Kristýna DOSTÁLOVÁ & Antti MOISIO, 2017. "Do political parties matter? Endogenous fragmentation, partisanship, and local public expenditures in Finland," Economics Working Paper from Condorcet Center for political Economy at CREM-CNRS 2017-02-ccr, Condorcet Center for political Economy.
    9. Lyytikäinen, Teemu & Tukiainen, Janne, 2019. "Are voters rational?," European Journal of Political Economy, Elsevier, vol. 59(C), pages 230-242.
    10. Antti Saastamoinen & Mika Kortelainen, 2020. "When Does Money Stick in Education? Evidence from A Kinked Grant Rule," Education Finance and Policy, MIT Press, vol. 15(4), pages 708-735, Fall.
    11. Lind, Jo Thori, 2020. "Rainy day politics. An instrumental variables approach to the effect of parties on political outcomes," European Journal of Political Economy, Elsevier, vol. 61(C).
    12. Sørensen, Rune J., 2023. "Educated politicians and government efficiency: Evidence from Norwegian local government," Journal of Economic Behavior & Organization, Elsevier, vol. 210(C), pages 163-179.
    13. Adam Pilny & Felix Roesel, 2020. "Are Doctors Better Health Ministers?," American Journal of Health Economics, University of Chicago Press, vol. 6(4), pages 498-532.
    14. Lockwood, Benjamin & Porcelli, Francesco & Rockey, James, 2022. "In the Grip of Whitehall? The Effects of Party Control on Local Fiscal Policy in the UK," The Warwick Economics Research Paper Series (TWERPS) 1406, University of Warwick, Department of Economics.
    15. Vuk Vukovic, 2021. "The politics of bailouts: Estimating the causal effects of political connections on corporate bailouts during the 2008–2009 US financial crisis," Public Choice, Springer, vol. 189(1), pages 213-238, October.
    16. Sebastian Garmann, 2020. "Voter turnout and public sector employment policy," The Review of International Organizations, Springer, vol. 15(4), pages 845-868, October.
    17. Baskaran, Thushyanthan & Hessami, Zohal, 2023. "Women in Political Bodies as Policymakers," IZA Discussion Papers 15983, Institute of Labor Economics (IZA).
    18. Konstantinos Matakos & Riikka Savolainen & Janne Tukiainen, 2020. "Refugee Migration and the Politics of Redistribution: Do Supply and Demand Meet?," Discussion Papers 132, Aboa Centre for Economics.
    19. Thomas Braendle & Alois Stutzer, 2017. "Voters and Representatives: How Should Representatives Be Selected?," CREMA Working Paper Series 2017-05, Center for Research in Economics, Management and the Arts (CREMA).
    20. Jon H. Fiva & Oda Nedregård & Henning Øien, 2021. "Polarization in Parliamentary Speech," CESifo Working Paper Series 8818, CESifo.

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